Bankruptcy settlement on track

University Medical Center CEO Jim Valenti, left, takes part in a meeting with County Commissioners Court concerning Children's Hospital. A joint agreement between UMC and Children's is still being worked on.(Photo: RUDY GUTIERREZ/EL PASO TIMES)Buy Photo

A joint plan for El Paso Children’s Hospital to emerge from bankruptcy was not filed Friday despite an initial deadline.

An official involved with the process said that the deal is still on track, but the wheels of government turn slowly.

After almost five months under Chapter 11 bankruptcy protection, Children’s Hospital has been working on a joint plan with its chief creditor, University Medical Center of El Paso, on a joint reorganization plan.

Exact details of the plan won’t be revealed until it is filed with the court.

But in exchange for cutting the hospital’s rent by 43 percent and likely forgiving some of the $100 million Children’s owes UMC, members of the existing hospital board are expected to vacate their seats and be replaced by people selected by the UMC board. UMC CEO Jim Valenti, who had become a lightning rod for many at Children’s Hospital, said he will not seek to renew his contract when it expires in May.

Negotiations for a partnership between UMC and Children’s have failed before and during the bankruptcy process. But El Paso County Judge Veronica Escobar on Friday said the latest deal is still on track.

The County Commissioners Court and the boards of UMC and Children’s Hospital have agreed to the terms of a plan to emerge from bankruptcy. UMC has deposited $7 million in earnest money with the court and lawyers continue to hammer out the details of the final plan.

Because of open-meetings laws, Tuesday is the earliest that the commissioners and the UMC board can meet to approve a plan, which can only be filed with the court after that, Escobar said.

“The deal’s on its way,” she said. “Everybody’s working within the confines of government.”

Lawyers in the case are scheduled to appear in court at 11 a.m. Tuesday in El Paso on a motion to hire counsel for some of the creditors other than UMC in the bankruptcy.

Marty Schladen may be reached at 512-479-6606; mschladen@elpasotimes.com; @martyschladen on Twitter.